ISLAMABAD:
The government on Friday increased the prices of petrol and high speed diesel (HSD) by Rs 15 amid the fluctuation in global oil prices due to the closure of the Strait of Hormuz from May 9 (today).
According to a press release issued by the Ministry of Power (Petroleum Division), the price of HSD has increased by Rs 15 per liter from the current Rs 399.58 to the new rate of Rs 414.58 per litre.
It also increased the price of petrol by Rs 14.92, raising the new price to Rs 414.78 per liter from the previous rate of Rs 399.86.
This is the second increase in fuel prices in May.
The government had increased the price of HSD to Rs 19.39 per liter last week. It had also imposed a petroleum tax of Rs 28 per liter on HSD, which was previously zero.
Pakistan State Oil (PSO) had imported diesel at a high premium of $34 per barrel, resulting in an increase in diesel price of Rs 120 per liter.
The government was now recovering that amount through taxes and freight. There was also pressure from the International Monetary Fund (IMF) to increase the oil tax rate.
Even the Oil Minister had earlier told the media that the government may increase the oil tax up to Rs 55 per liter due to pressure from the IMF.
Last week, the government also increased the price of petrol by Rs 6.51 per litre.
HSD is widely used in the transportation and agriculture sectors. Crop planting season is underway; Therefore, the increase in their prices will negatively affect the agricultural sector where input costs are already high.
The price of fertilizers has already increased due to the rising cost of transportation.
Gasoline is used in motorcycles and cars. However, the prime minister had earlier announced the continuation of a subsidy of Rs 100 per liter for motorists.
CNG is an alternative to petroleum but Punjab lacks indigenous gas for CNG outputs and hence the demand for petrol is even higher in the country’s most populous province.
During the current Gulf War, Iran and the United States have maintained a blockade of the Strait of Hormuz, which supplies 20% of the world’s oil.
The entire world is facing a crisis-like situation as oil prices have increased due to tight supplies. Middle Eastern countries such as Saudi Arabia, the United Arab Emirates and Kuwait are also facing supply problems as their oil facilities have been affected. Iran is also a key supplier of oil to China.
